Alezandray’s Interiors, Inc., is a leading international manufacturer and retailer of home furnishings. The following is from Alezandray’s balance sheet as of September 30, 2017. (Dollars are in millions.) 

Assume that the following events occurred in the quarter ended December 31 (dollars are in millions): 

a. Paid $2,000,000 cash for an additional “other asset”

b. Issued additional shares for $2,000,000 in cash

c. Purchased property, plant, and equipment; paid $2,000,000 in cash and signed a note to pay the remaining $9,000,000 in two years

d. Sold, at cost, other assets for $1,000,000 cash

e. Conducted negotiations to purchase a sawmill, which is expected to cost $36,000,000

Required: 

1. Analyze transactions (a) through (e) to determine their effects on the accounting equation. Use the format shown in the demonstration case. 

2. Record the transaction effects determined in requirement 1 using journal entries. 

3. Summarize the journal entry effects from requirement 2 using T-accounts. Use the September 2017 ending balances as the beginning balances for the October to December 2017 quarter. 

4. Explain your response to event (e). 

5. Prepare a classified balance sheet at December 31, 2017. 

6. As of December 31, 2017, has the financing for Alezandray’s investment in assets primarily come from liabilities or from shareholders’ equity?

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Cash $ 80 Accounts Payable $ 29 Accounts Receivable 12 Wages and Other Expenses Payable 111 Inventories 188 Long-Term Debt 203 Other Current Assets 26 Other Long-Term Liabilities 44 Property, Plant, and Equipment 355 Contributed Capital 356 Other Assets 99 Retained Earnings 20